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Money Trees

I often refer to rental properties as “Money Trees”.  With an end goal of owning an orchard.  A house or rental property is just like a fruit tree, if you take care of it then it will produce fruit or money. If you don’t take care of it then it could potentially wilt and die. Fruit trees need water, sun light, pruning, etc….

A rental property has needs just like a tree. Besides the obvious needs like a tenant, water, electricity and or/gas it also needs maintenance.

I’m going to create two categories for repairs. One is maintenance or preventive maintenance and the second is CAPEX or Capital Expense.
Real quick I’ll hit on the second one first and then spend more time on the primary topic of interior preventative maintenance.

CAPEX is an expense where the benefit is spread out over a long period of time such as replacing a roof, typical life expectancy of a roof can range from 20 to 35 years and weather has a lot to do with that life expectancy. Another example is installing a new furnace. Furnaces can last up to 50 plus years when taken care of. I often buy homes that still have the original furnaces from back in the 60’s and it’s almost a shame to take them out and replace them. These are CAPEX items.

Rental property interior preventive maintenance.

Let’s start with that furnace that just got replaced. In a perfect setting with no dust to filter out, your new furnace could run 20 to 50 years or possibly more in a perfectly clean environment. But that’s not realistic and your furnace needs upkeep. The most preventable killer to furnaces is dirty or clogged furnace filters. I have had furnaces burn up from the lack of air flow through dirty furnace filters. Before they burn up they will run for short periods and then kick off and on. So do you just eliminate filters all together? Filters are there to protect the inner workings of the system as well as filter out particulates that are pulled into your home, so you need the filters. The solution – change your filter at least every other month. If you have Air Conditioning then you need to do this during the summer as well. I like to do an annual inspection of my rentals and at that time I bring a few filters with me and change the filter in front of the tenant and make sure they understand how to do it. I express the importance of it and praise them if it looks like they have been doing this themselves. I also like to leave an extra filter or two with the tenant. Filters are cheap, furnaces are not. One more thing to keep in mind is air flow. You need to make sure that the furnace isn’t being crowded by stuff and has proper space around it. I’ve seen boxes, clothes and other items stacked against furnaces and this also cuts down on the amount of air a furnace can take in and can suffocate a furnace just like a dirty filter can.

Hot Water Heaters- To get the most out of your hot water heater you can hook a hose up to the drain line at the bottom drain faucet and drain your hot water heater every couple of years which helps get rid of sediment at the bottom. I’ve replaced water heaters that were a third full of sediment which reduces the volume of water that can be heated and can ruin electric heating elements that are on the bottom of the water heater. Make sure you turn the water valves at the top of the water heater off while you’re doing this. You should also turn the breaker off to the electric water heater and shut the gas off to a gas water heater while you’re draining it. PLEASE READ ALL MANUFACTURER’S INSTRUCTIONS WHEN DRAINING AND LIGHTING HOT WATER HEATERS AND GET QUALIFIED HELP IF NEEDED.

Bathrooms – Exhaust fans that are vented to the outside of a home are best for cutting down unwanted smell but more importantly to help exhaust moisture out of the bathroom which will help cut down on mold and mildew. Beware of exhaust fans that just vent into the attic, (this just adds moisture to the attic not good). If you have a window in the bathroom that will serve the same purpose but I’ve noticed that people don’t like to open a window to vent out the moisture in colder weather.

Kitchens – I remove garbage disposals when renovating a home. I also put on my lease agreements that if an existing garbage disposal quits working, I will remove it. A lot of people will use a garbage disposal correctly with no problems. However you have your percentage of people that treat it like a garbage can and then call when it’s jammed up or doesn’t work. Solution – don’t have one from the beginning. Dishwashers are something I don't add unless the rental price point calls for it. If there is one there or if I have to replace one prior to a tenant moving in then I like to state in the lease and in person (PM does this) that the dishwasher is their responsibility, if needing repair. 

Ceiling fans – When renovating if the fan works well and looks nice I’ll keep it. If it is at all questionable, I remove it. I put in my lease agreement that if the fan quits working, I will replace the fan with a two bulb flush mount light fixture. There are some situations where I have a responsible tenant in which I will replace the fan with another fan, however I like to have a choice in the matter on the rare occasion I install a new fan, the tenant just received a bonus.

Flooring – I like houses that have hardwood floors. I never cover these up with carpet. It’s a similar cost to refinish a hardwood floor as it is to cover it up with carpet. The 60 year old hardwood floor will last a lot longer than carpet will. Some people prefer vinyl squares over tile because they can change a ripped square very easily. I prefer tile but I can’t give you a strong opinion as to which is best as they both have their pluses and minuses. Whichever you choose make sure you buy extra for future replacements.

Paint – I go with a high gloss in the kitchen and especially the bathroom. This is easier to clean and helps resist mold and mildew. Go for neutral colors.

Doors – I prefer bypass closet doors versus bi-fold doors, way less problems.

 

I’m sure there are items that I’m overlooking but I believe these to be some of the most common areas to be concerned with. An interior inspection of the home every year is definitely worthwhile. Please let me know if you have any examples of items that you think I should have listed as well as any specific questions I can answer. Please see my article on Exterior Preventative Maintenance. Thank you for taking time to read this and as always I wish you the best of luck tending to your Money Tree. Make it a Sunny Day!

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